Young adults still face coverage gap, despite health reform

Every year, as college graduation approaches, Michael Kurland gets an onslaught of anxious phone calls from parents who realize their children are about to lose their health insurance.

“Parents call and ask me, ‘Oh my God, what do we do?’,” said Kurland, director of Student Health Services at the University of Connecticut.

This year was no different, even though the health care overhaul passed by Congress included a provision aimed specifically at helping young adults stay insured. It allows them to stay on their parents’ plans until age 26–but it doesn’t take effect for months.

That leaves thousands of recent graduates right where their predecessors have been: scrambling for coverage, or deciding to do without.

Right now, Kurland and others say, there aren’t a lot of good options, particularly for young adults who have existing health problems. Even those without specific health concerns can face expensive premiums and high deductibles.

“A lot of them risk being uncovered because it’s so prohibitively expensive,” says Evelyn Gard, a spokeswoman for Gateway Community College in New Haven. Some new graduates make use of free clinics, she said, “so they can at least get basic things like birth control or antibiotics if they are sick.”

Young adults-those 19 to 29 years old-currently have the highest uninsured rate of any age group in the U.S., accounting for nearly one-third of the country’s uninsured, or about 13.7 million people.

Although coverage varies by plan and by state, many private insurers, employers with self-funded plans, and public programs stop covering workers’ dependents at age 19, unless they are full-time students. For full-time students, insurers generally end dependent-care coverage between the ages of 23 to 25. But when students graduate from college, they can lose coverage within days.

Connecticut already has a state law on the books requiring insurers and employers to cover children under 26 on their parents’ policies. But about half the employers in the state–including many of the largest–are exempt from that law because their plans are federally regulated. And even some families who are eligible have passed on it, because they have to pay federal income tax on the cost of that benefit, said Ellen Andrews, executive director of the Connecticut Health Policy Project, a non-profit, non-partisan group focused on improving access to health care. The new federal health overhaul will remove those barriers.

“We’re really hopeful that this is going to make a serious dent in the uninsured rate,” Andrews said. She said getting young adults covered could have myriad additional benefits.

“We’re bringing kids in at point where they’re not as good at understanding the need for preventive care,” she said. It is a key “teachable moment,” she said, when health professionals can educate young adults about risky behaviors, such as smoking, drinking, and poor diet, that could make a huge difference in their health–and health care costs–down the line.

Half of uninsured young adults have family incomes below $15,000 a year, making insurance unaffordable, according to a report by the Kaiser Family Foundation, a non-partisan foundation that conducts health care research and analysis. “Young adults’ current high uninsured rate puts both their physical and financial health at risk,” the report concludes.

Kurland, of the University of Connecticut, tells students real-life horror stories to convey the risks of going even one or two weeks without health insurance.

“We’ve had students who’ve had an appendectomy and by the time it’s done, it’s a $25,000 charge,” he said. “We’ve had students who’ve been hit by cars. We’ve had students who we’ve discovered have active tuberculosis.”

The provision of the reform law requiring coverage up to age 26 doesn’t take effect until September, and insurers have until the start of the next plan year–usually January–to implement it. Given the high stakes, lawmakers and advocacy groups are pressing major employers to voluntarily offer the coverage now. Some insurers and businesses have said they would adopt the benefit early.

But many other companies are holding off until they are legally required to put the new coverage in place. One recent study of about 800 U.S. employers found that only about one quarter of those who don’t currently offer the benefit said they would do it ahead of the legally mandated date.

“We are concerned” about the coverage gap facing newly-minted graduates, said Ari Matusiak, a co-founder of Young Invincibles. Young Invicibles was started in the cafeteria of Georgetown University’s law school when Matusiak and others felt that the concerns of young uninsured Americans were not being heard in the health reform debate.

Now, he said, the group is working with employers, young adults, and parents to educate them about the new law and press for quick adoption of the under 26 provision.

“There are some administrative costs to employers, in pushing up their plan year or creating a special enrollment period,” Matusiak said. “But there also are compensating benefits, which include the value that young people provide by being in an employers’ insurance pool. We’re healthy and create a more efficient and economic insurance pool. And you have more content employees, because they will know their kids are covered. So we’re trying to talk to employers and start that dialogue to see how everyone can benefit and win from this.”

A similar move is afoot in Congress. In the Senate, six lawmakers recently wrote to a leading business lobby group, the Business Roundtable, asking them to urge their members to put the option in place now. And Rep. Joe Courtney, D-2nd District, has made a personal pitch to some employers in Connecticut, including United Technologies Corp., which has agreed to offer the new coverage starting July 1.

“There are times when families need this,” said Courtney, noting that his own brother died from cancer at age 26.